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¢ — Instant Book impact: The Instant Book transition could impact meta rates and total monetization as more hotel shoppers flow through large OTA partners. ¢ Hotel Shopper growth: Given elevated marketing spend, we expect to see a rebound in hotel shopper and hotel revenue growth. 4Q16 hotel shopper growth accelerated from 3% in 2Q-3Q16 to 8%. We expect hotel shopper growth to decelerate slightly to 6% in 1Q17 on a 200bps tougher y/y comp. 1Q traffic data points: comScore indicates solid mobile and PC user growth In the US, comScore reported quarter to date through February, average monthly unique visitors of 31mn on PC and 56mn on mobile, up 24% and up 3% y/y, respectively. TripAdvisor total minutes in 1Q through February is up 10%, with mobile minutes up 5% and PC minutes up 17%. In our view, TripAdvisor’s elevated marketing spend YTD likely targets higher monetizing PC traffic. Estimates vs. Consensus: Broadly in-line on Revenue, below on EBITDA/EPS Our 1Q revenue estimate of $379mn is broadly in line with the Street at $377mn. We are more cautious on EBITDA and EPS at $71mn/S0.23 vs. the Street at $76mn/S0.27. Table 25: TripAdvisor estimate summary 1Q17 2017 2017 2018 2019 Revenue BofAML est. $379 $432 $1,647 $1,794 $1,936 Growth Y/Y% 8% 10% 11% 9% 8% Street $377 $433 $1,649 $1,852 $2,095 BofAML vs. Street Above Below Below Below Below EBITDA BofAML est. $71 $88 $346 $403 $471 Street $76 $88 $339 $392 $530 BofAML vs. Street Below Above Above Above Below EPS BofAML est. $0.23 $0.31 $1.22 $1.57 $1.89 Street $0.27 $0.32 $1.23 $1.48 $2.28 BofAML vs. Street Below Below Below Above Below Source: BofA Merrill Lynch Global Research, Bloomberg, as of 4/4/2017 Our price objective of $40 is based on 25x our 2018 non-GAAP EPS estimate. This multiple represents a modest premium to the group for possibly depressed margins and potential for re-accelerating top-line growth. 38 _Internet/e-Commerce | 06 April 2017 Bankof America <2 Merrill Lynch HOUSE_OVERSIGHT_014924